18th May – Daily Currency Market Report.

The market in brief: 

  • AUD consolidates
  • NZD pulled lower
  • US Manufacturing disappoints
  • US Capacity Utilisation drops
  • US Industrial Production weaker
  • US Consumer Sentiment down
  • Gold at $1,215 & Brent Crude at $66.50

Market moving events due:

  • RBA Dep Gov Lowe speaks
  • FOMC Member Evans speaks
  • BUBA monthly report
  • Canadian Bank Holiday
  • US Housing Market Index
AUDUSD: The Aussie was understandably on the back foot again as we consolidated the 4 month highs and as we headed into the weekend. The move was not as sizeable as it could have been due to a string of weaker than expected US data, that once again suggests no rate hike from the Federal Reserve in H1’15. The week ahead will be centred on tomorrow’s minutes from the recent RBA meeting in which they cut interest rates, so we’ll look for signs of timing into their next move. Technically we have closed above key support that suggests the upside momentum should continue. Our target sits USD 2.5 cents above.

AUDEUR: The Euro benefited the most with the weaker US Dollar and as the market expects some form of deal to be done over Greece’s debt this week. This pair moved down to 2 week lows and remains firmly in the 5 cent range that has held since March. Focus this evening is on the German central bank’s monthly report and comments on the economic situation. With no technical breakout expected just yet, it should be simply a case of putting orders at either side of the range and wait for them to be hit. Call us for suggested levels.

AUDGBP: The Pound hit 6 month highs versus the Greenback and understandably then took this pair lower, although losses again were not as much as they could have been. UK Inflation data comes tomorrow and the announcement of voting at the last Bank of England meet is on Wednesday. Neither of which really has the potential to surprise, however UK Retail Sales data comes Thursday and Governor Carney speaks on Friday so should mean volatility hits towards the end of the week. On the charts resistance sits 100 points above and we could well head there over the next 72 hours, but that should be as good as it gets for importers short term. Exporters may want to wait till the end of the week for orders to be hit.

AUDNZD: The Tasman Cross traded lower throughout the whole of the Friday session as importers and speculative traders took advantage of the highs ahead of the weekend. NZ Focus this week is on the RBNZ Inflations Expectations report tomorrow afternoon and then the NZ Global Dairy Trade price later that evening. Looking to the charts and taking the fundamentals into consideration, we cannot see any reason for sizeable downside and confirm our view that we are headed back to Q3’14 highs albeit with shallow corrective dips.

Quote of the day: The art of being wise is the art of knowing what to overlook. William James  

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